I am purchasing a house under construction, slated to be finished early November for the tax rebate. I qualify on this for the Rural Development Loan, and am looking to lock in around 60 days out for a fee of .125% higher than market value.

This date is coming up in the next couple weeks, and I'm having problems knowing what the rate on the RD loan would be. There is plenty of information available on general FHA rates, but I can't find any on the RD loan. Is there any rule of thumb relation to the FHA loan so I can know when to consider locking in, besides asking my contact at the mortgage company what the current rate is on a daily basis? Is the RD loan rate always going to be higher or lower than the given FHA rates?

FHA pricing is going to be better than USDA pricing.  I haven't followed the differences closely but from what I quickly looked at it appears that USDA pricing will cost an additional 3/4% to 1.25% in fee for a comparable FHA rate.  Of course USDA doesn't have the ongoing monthly mortgage insurance or the down payment requirement that an FHA loan has.

Nicholas,

There is no relation between the FHA rates and RD rates, other then the fact that they will generally rise or fall together in accordance with mortgage backed securities.  RD rates will also not be set higher or lower than FHA rates, they are determined by the lender.  There is a max rate that RD will allow a lender to charge (this will fluctuate based on current trends), but each lender will have it's own pricing/rate sheets in terms of what they're offering. 

However, they do tend to be in the same range, so if you're being quoted a rate that seems too high, re-post on here and see if anybody can back it up.  I would also caution that the information on FHA rates and other rates you see online may not be totally accurate for your situation.  The loan size, state you live in, closing costs, etc. would affect your rate and there's not any site out there that can say, "this is what your rate should be". 

Thanks to both of you. I will just continue to watch the rates posted on mortgage rate watch to stay current on the general trends, then once I feel comfortable that I'm not in a high trend I'll start pinging my mortgage company more often.

You're welcome Nicholas, glad to help.  I would disagree with what Brian said though, as far as the difference in rate is concerned.  I work in Michigan and currently I would be offering about the same rate for either FHA or RD.  If you want to post some specifics about your loan some other professionals who cover your state may be able to let you know if it's reasonable.